As of June 2, 2025, Marathon Oil Corp has a Discounted Cash Flow (DCF) derived fair value of $42.58 per share. With the current market price at $28.55, this represents a potential upside of 49.1%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $37.06 |
| DCF Fair Value (10-year) | $42.58 |
| Potential Upside (5-year) | 29.8% |
| Potential Upside (10-year) | 49.1% |
| Discount Rate (WACC) | 7.5% - 9.6% |
Revenue is projected to grow from $6680 million in 12-2023 to $8581 million by 12-2033, representing a compound annual growth rate of approximately 2.5%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2023 | 6680 | 17% |
| 12-2024 | 6613 | -1% |
| 12-2025 | 6636 | 0% |
| 12-2026 | 6831 | 3% |
| 12-2027 | 6968 | 2% |
| 12-2028 | 7107 | 2% |
| 12-2029 | 7525 | 6% |
| 12-2030 | 7840 | 4% |
| 12-2031 | 7997 | 2% |
| 12-2032 | 8413 | 5% |
| 12-2033 | 8581 | 2% |
Net profit margin is expected to improve from 23% in 12-2023 to 27% by 12-2033, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2023 | 1554 | 23% |
| 12-2024 | 1782 | 27% |
| 12-2025 | 1789 | 27% |
| 12-2026 | 1841 | 27% |
| 12-2027 | 1878 | 27% |
| 12-2028 | 1916 | 27% |
| 12-2029 | 2029 | 27% |
| 12-2030 | 2113 | 27% |
| 12-2031 | 2156 | 27% |
| 12-2032 | 2268 | 27% |
| 12-2033 | 2313 | 27% |
with a 5-year average of $1700 million. Projected CapEx is expected to maintain at approximately 32% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2024 | 1603 |
| 12-2025 | 1765 |
| 12-2026 | 1999 |
| 12-2027 | 2161 |
| 12-2028 | 2216 |
| 12-2029 | 2275 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 64 |
| Days Inventory | 67 |
| Days Payables | 679 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 3M/2024 | 957 | 27 | 536 | (49) | 442 |
| 2025 | 3997 | 110 | 2153 | (5) | 1739 |
| 2026 | 4296 | 113 | 2216 | 64 | 1903 |
| 2027 | 4504 | 115 | 2260 | (50) | 2179 |
| 2028 | 4606 | 117 | 2305 | 3 | 2180 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 37.06 | 29.8% |
| 10-Year DCF (Growth) | 42.58 | 49.1% |
| 5-Year DCF (EBITDA) | 34.20 | 19.8% |
| 10-Year DCF (EBITDA) | 40.28 | 41.1% |
Is Marathon Oil Corp (MRO) a buy or a sell? Marathon Oil Corp is definitely a buy. Based on our DCF analysis, Marathon Oil Corp (MRO) appears to be significantly undervalued with upside potential of 49.1%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $28.55.